Housing Bill could force local councils to raise up to £145m a year

Higher value social housing will be sold off to fund the government's right to buy extension

The average council in England will have to pay the government £26m a year to fund discounts for housing association tenants taking advantage of Right to Buy.

According to new research from Shelter, the government’s Right to Buy extension could require councils to sell 23,500 high-value council homes across the country each year. The council with the largest bill is Birmingham, which needs to raise £145m per year, followed by Leeds (£129m) and Southwark (£122bn).

The sale of high-value properties that become vacant is the government’s means of raising the £4.5bn needed to subsidise purchases through housing associations by up to £100,000.

Shelter’s primary concern is that there is no plan to replace the homes sold with alternative social housing, meaning that large numbers of families will be cut out of the market because they can neither access social housing or pay £250,000 for an ‘affordable’ starter home.

‘With millions of families struggling to find a home they can afford, forcing councils to sell-off huge swathes of the few genuinely affordable homes they have left is reckless,’ commented Shelter chief executive Campell Robb.

‘Whilst the small number of lucky winners from this policy will understandably be grateful for the chance to buy their Housing Association property, far more people will lose out and be left with no choice but expensive, unstable private renting.’

The government did suffer a defeat on council sell-offs in the House of Lords, when peers support a Lord Bob Kerslake’s amendment proposing that councils be allowed to retain enough of the funds from sale of properties to build replacement social housing. However, the amendment may be voted down by the Commons, which debates the Lords amendments this week.

The Housing Bill, one of the most substantial pieces of legislation the government will introduce during this parliament, has been widely criticised — suffering 13 defeats in the House of Lords. Introduced very soon after the general election, it’s designed to meet the Tories’ manifesto commitment to expand home ownership.

However, critics insist that the bill is the final nail in the coffin of social housing, establishing it as merely a short-term option for the most disadvantaged and forcing many more into private rental arrangements.

While housing will be a major issue in tomorrow’s council elections, intense government pressure and funding cuts have left local councils with little power to address the crisis.